Veteran media and criminal defense attorneys agree that the Daily Caller could be subject to a possible libel or defamation lawsuit or even criminal charges if it is proven the publication paid women to lie about having sex with Sen. Robert Menendez for money.

The Daily Caller first reported[1] in a November 1 story allegations from two anonymous women who claimed they were Dominican prostitutes who had been paid by Menendez for sex. Over the past month, the story has slowly fallen apart.

Dominican law enforcement officials have said they determined that the three women who had made allegations about Menendez had actually been paid[2] to do so by Miguel Figueroa, a Dominican attorney who was the only named source in the original Caller report. One of the women has reportedly signed[3] an affidavit retracting her claims and said she was paid to lie.

Last week[4], the head of the Dominican National Police said Figueroa had blamed the Caller for the entire debacle, claiming that someone allegedly from the publication had supposedly paid him to find prostitutes who would lie about having sex with Menendez.

The Daily Callerhas strongly denied making any payments.

Nonetheless, one criminal defense attorney told Media Matters the news outlet or anyone else who paid the prostitutes for their false story could face criminal charges that might involve wire fraud.

"Suppose all of these individuals lied and they were paid to lie and the advantage in some proprietary way flows to the people who paid them and there was a communication over U.S. or U.S and foreign communications facilities, you might make out a wire fraud," said Stuart Pierson, a Washington, D.C. attorney who specializes in white collar crime and media issues. "If there is a communication involving U.S. transmission communication facilities and the purpose of this lie and fraud is to adversely affect the proprietary interest of somebody in the United States or a U.S. Citizen."

A Department of Justice spokesperson declined to comment on any investigation that might be related to the reporting of the story.

Pierson and other attorneys agreed a defamation or libel civil charge is likely if it is found the Daily Caller knew the information was false, and is increased if it is found they paid someone to lie, or knew that someone was paid to lie.

"It would seem to me that that would make proving actual malice easier, if you are paying someone to lie it seems you have knowledge that what you are saying is not true," said George Freeman, a veteran media attorney and former assistant general counsel for The New York Times. "That is pretty good evidence in favor of the plaintiffs. It would depend on the facts, but the facts as to actual malice would be implicated by what the person knew and if they were paid for what they said that would give the plaintiff a leg up on the actual malice issue."

"If the claim that they paid a source to lie, if that claim is true, then I would presume that Menendez would have a pretty good claim for libel. It is hard to argue that contending that a senator had sex with prostitutes isn't defamatory," she said. "I think you would probably be able to overcome that hurdle and it would be difficult for a publication to defend paying a source to lie."

Dave Schulz, a New York media lawyer with Levine, Sullivan, Koch and Schulz, said a civil action would be easier if it is found the publication knew it was a lie and paid for the lie.

"If Menendez really wanted to pursue it, he would have a pretty strong defamation claim, publishing something that is knowingly false," he said. "If someone solicited a lie and published it that would be almost the classic definition of malice, if you are paying."

But Schulz also said a criminal action could be possible for fraud depending on the details. "From a newsgathering perspective, you want to look at whether there is any kind of liability against who offered to pay money for the lie," he added. "If there is a wire fraud or mail fraud, that would be one concern I would have."